An ideal sales incentive plan should be simple. It helps sales representatives to understand the correlation between their performance and their payout. Simple sales incentive plans are easy to administer and offer motivation.
How to simplify your sales incentive plan
Here are a few tips on how to simplify your sales incentive plan:
1. Specify The Goals and Objectives
A focused target is easier to understand and attain. It’s essential to analyze and set objectives, and set goals should specify the desired results. Communicate these objectives to sales reps and realize viable steps towards their achievement. The sales incentive plans should align with the company’s specific goals and objectives too.
2. Avoid Altering The Incentive Plan
During inception, plans are usually simple and easy to comprehend. However, over time the plan is changed to solve short-term issues such as weak sales. Management may also alter the plan to straighten out inconsistencies relating to the plan’s mandate and performance. Avoid changing the plan and simply denote additions, corrections, and alterations separately as a part of the primary objectives.
3. Align The Company’s Interests
A company has many functional areas that are all represented in the plan design. Different departments at one time may end up with conflicting priorities. It’s the sales department’s duty to align the different departmental interests into simple, achievable objectives which can be relayed to sales representatives. Tailor each plan to suit individual representatives’ strengths.
4. Keep The Plan Simple
The incentive plan should align with the company goals. It should be easy to communicate to sales reps and provide simple objectives for managers to work towards. Provide shortlists that the sales representatives need to achieve to attain their pay and bonuses. A long list adds complexity to the tasks. Use easy metrics for sales representatives to keep track of their performance.
5. For a Sales Incentive Plan, Less is More
With technology and a rise in sophisticated products, a sales job is now more complicated than before. Complexity easily demotivates and frustrates sales representatives which reflects in the sales. A strategic incentive process creates an effective and comprehensible sales plan.
With these helpful tips, simplify your sales incentive plans to keep a motivated team and increase your sales margins.